Commentary

Facebook privacy report long overdue

Commentary: Users deserve to know how data is protected - or not

By

JohnShinal

SAN FRANCISCO (MarketWatch) — With trading volume slowing like northbound holiday traffic on the New York State Thruway, this column turns its attention to the decision by Facebook Inc. Chief Executive Mark Zuckerberg this week to release more details on government requests for data about users of the world’s largest social network.

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Facebook CEO Mark Zuckerberg.

In summary: it’s about time, Mr. Zuckerberg.

Few investors would argue that more transparency in financial reporting leads to public companies being more accountable to their shareholders, and shareholders who are more informed.

Similarly, more transparency regarding data requests made by U.S. law enforcement and counter-terrorism agencies allows Internet consumers to make more informed choices, by knowing how well online service providers are or are not protecting their privacy.

Google has been issuing such reports since 2009, and privacy advocates have in the past criticized Facebook
FB, -6.77%
for not providing equal transparency.

Facebook, which has approximately 1 billion users across the globe, offers the least protection to users in its home country. The Menlo Park, Calif.-based firm handed over information that the U.S. government asked for 79% of the time.

That’s more often than it handed over user data in the U.K., where Facebook complied with 68% of roughly 2,000 law-enforcement requests, and far more often than in France, where the company cooperated on only 39% of more than 1,500 requests for data.

For comparison in the U.S., Google said it complied — either fully or partially — with 90% of the roughly 8,000 requests it got from government agencies in the first half of 2012.

It’s too soon to know whether any Internet firm’s privacy policy — whether it protects users from intrusion or not — can be an asset or liability in the marketplace for online services.

Baby boomers are often aghast at what gets posted on Facebook, but the fact that users from younger generations are willing to expose the intimate details of their lives online suggests that a great deal of social media users don’t care much about privacy.

Likewise with the more than 400 million users of Gmail, who keep typing messages into the software application even though Google scans every one of them for keywords.

Given that all U.S. tech firms with a large number of online users — including Yahoo, AOL and Microsoft, among others — are surrendering data, none are staking out a market position as defenders of Internet privacy.

In addition to the U.S., U.K. and France, other countries with more than 1,500 requests for Facebook data include India, Germany and Italy.

In the wake of revelations by whistleblower Edward Snowden that the U.S. government has ready access to the phone calls and email communications of all Americans, some niche email players have attempted to use privacy as a marketing tool.

Yet those efforts are unlikely to prompt a significant number of users to switch from Facebook. Where else would they post pictures of their kids or vacations?

Thanks to the so-called “network effect,” Facebook has a dominant share of the global market for consumers who want to share stuff online.

That means its users — like those who use the services of Google and others — are forced to accept the reality that the government, if it wants to, can view their life’s details simply by contacting the company that hosts the content.

In fact, the Facebook report shows that, more than 100 times a day, Zuckerberg’s company is handing over data that includes not just basic information but also IP addresses and user content.

Yet that’s not unusual, since Google’s reports reveal that the number of such data requests has risen sharply during the last three years.

So while the Facebook report is no comfort to privacy advocates, it does represent progress at the social network, because it allows users to see how much information the company is handing over, relative to its rivals.

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